A SECONDARY school has been warned by the Government it could be shut if its finances are not put in order.

The Department for Education has issued a warning to Portslade Aldridge Community Academy (PACA) stating it must pay back the £100,000 it owes the Government from a loan and submit an action plan to balance its books by January 26.

Limits have also been put on transactions the academy can make and failure to meet the notice’s demands could result in the Government seizing power of the school, ousting the governing body or shutting it.

A spokesman for the Aldridge Foundation, which sponsors school in Chalky Road, Portslade, said: “The academy is working with the Educational Funding Agency [EFA] to put together the agreed plan to balance the accounts, including repaying this short-term loan, and anticipates no problem in completing this by January 26.

“With a rising school-aged population in Brighton and Hove, planning to address the potential shortfall in secondary school places in 2017/18 has been ongoing for some time.

“The recent £13 million investment in new buildings and facilities at PACA is part of ensuring that the city has enough secondary school places in future.

“Before this increase in students moves from primary to secondary school age, and with the new buildings now open, PACA is currently undercapacity.

“The financial notice is part of a planned process that the academy is working through with the EFA to bridge the short-term financial gap between the current student numbers and the new facilities. The school is set to meet with EFA representatives today.

The notice, sent to the school on December 17, stated: “In the event that the trust fails to meet the requirement of this notice, to the satisfaction of the Secretary of State, the trust will be considered to have failed to comply with the terms of the Academy Financial Handbook (AFH), which all academies must comply with by virtue of the EFA.

“As a result of this breach of the AFH, and therefore also the EFA, the termination process in the EFA may be triggered.

“Depending upon the severity of the breach, this may be considered a material breach of the terms of the EFA and lead to termination.”

This action would be taken if the school failed to submit its plans and did not pay back the loan, but a Department for Education spokesman said this was “very unlikely”.

He added: “We have issued Portslade Aldridge Community Academy with a Financial Notice to Improve [FNtI] due to concerns about financial management at the Trust [school].

“The FNtI will be in place until we are satisfied the trust has taken effective action to address our concern. Academy trusts operate under a strict system of oversight and accountability – more robust than in council-run schools – which means any issues are identified and we can take swift action.”